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Energy bulls charge into Devon

Devon Energy has been blasting higher along with other shale names, and the bulls are looking for more.

optionMONSTER's Heat Seeker tracking system identified heavy buying in the July 80 calls on Friday, with more than 16,000 trading for $0.80 to $1.19. The volume was well above the strike's previous open interest of 9,262 contracts, indicating that new positions were initiated.

Long calls lock in the price where investors can buy a stock, letting them cheaply position for a rally with limited risk. The contracts can also generate significant leverage if shares move in the right direction, but they can quickly lose value if the stock drops. (See our Education section)

DVN gained 1.35 percent on Friday to close at $78.04, just off its session high. The oil and natural-gas producer has been trending steadily higher from below $65 in late March.

Total option volume in the name exceeded 25,600 contracts on Friday, more than triple its daily average for the last month. Overall calls outnumbered puts by a bullish 9-to-1 ratio.

(A version of this post appeared on InsideOptions Pro on Friday.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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